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Consumer Trends, Attitudes and Spending on the Home - UK - January 2021

OVERVIEW
Key issues covered in this Report
COVID-19: Market context
Impact of the January lockdown and the vaccination rollout
Economic and other assumptions
Products covered in this Report
EXECUTIVE SUMMARY
Total sales drop despite new opportunities
Figure 1: Short, medium and long-term impact of COVID-19 on consumer trends, attitudes and spending habits for the home, 4 February 2021
The market
Figure 2: Consumer spending on the home, 2015-2025, 9 February 2021
Home improvement and household appliances sit at the forefront of growth
Online pureplayers spearhead new growth 
Companies and brands
Retailers continue to target sustainability 
Harnessing social media 
The consumer 
COVID-19 has seen a fundamental shift in shopping behaviours
Figure 3: Changes to shopping behaviour, 21-26 January 2021
Three quarters of consumers spent on the home in 2020
Figure 4: Consumer spending on the home, 2018-2021
Growth is matched in spending intentions over the next year
Figure 5: Intentions to spend on the home, 2019 and 2020
Extended periods inside open new sources of demand
Figure 6: Triggers to purchase, October 2020
Online just peaks in-store at the start of the purchasing journey
Figure 7: Sources of inspiration, October 2020
AR tech comes to the fore, as virtual design services could be here to stay
Figure 8: Most important factors online, October 2020
Wellbeing and sustainability continue to offer opportunities
Figure 9: Behaviours in spending on the home, October 2020
A third expect to boost spending in the next year
Figure 10: The impact of COVID-19 on spending in the year ahead, October 2020
Ongoing uncertainty will maintain the spotlight on communal and outdoor areas
Figure 11: The impact of COVID-19 on spending in the year ahead, October 2020
Those spending less look to be more savvy 
Figure 12: The impact of COVID-19 on spending in the year ahead, October 2020
ISSUES AND INSIGHTS
The short-term impact from COVID-19
The long-term impact from COVID-19
How retailers can cater to the lower end of this polarised demand
THE MARKET – KEY TAKEAWAYS
COVID-19 disruption ends a decade of growth
Uncertainty will polarise demand in the market
Home improvement and household appliances sit at the forefront of growth
Online pure players spearhead new growth
MARKET SIZE AND FORECAST
Total sales drop despite new opportunities
Figure 13: Short, medium and long-term impact of COVID-19 on consumer trends, attitudes and spending habits for the home, 4 February 2021
COVID-19 disruption ends a decade of growth
Spending falls sharply between March and May 
Reduced appetite for big-ticket purchases for much of the year
New opportunities amid extended periods inside 
A polarisation of demand
Before steadily recovering speed from 2021
Opportunities to upscale expenditure…
…but demand will remain polarised 
Purchasing for the home online moving forward 
Continued COVID disruption
Figure 14: Consumer spending on the home, 2015-2025, 9 February 2021
Market drivers and assumptions
Figure 15: Key drivers affecting Mintel’s market forecast, 2015-25 (prepared 15 December 2020)
Learnings from the last recession
Figure 16: Consumer spending on the home, 2008-2012
MARKET SEGMENTATION
Big-ticket furniture sales drop 
Home improvement sales surge  
Household appliances outperform as consumers remain housebound
Figure 17: Consumer expenditure on the home, by category, 2020 (est)
CHANNELS TO MARKET
Homewares and furniture stores hit by store closures
Online pureplayers spearhead new growth
Specialists hold their own
Discounters, supermarkets, DIY stores and garden centres gain from non-closures
A year of turmoil for department stores
Figure 18: Channels to market, goods for the home, 2020 (est)
MARKET DRIVERS
The impact of the January 2021 lockdown 
House moves fall by 56.8% in April 2020…
…before picking up sharply 
Figure 19: Monthly UK residential property transactions, January 2018-December 2020
Many younger consumers continue to rent 
Figure 20: Household tenure, by age, October 2020
Low inflation eases disruption
Figure 21: Consumer price inflation index, December 2019-December 2020
Home cooking and baking surges with restrictions
Figure 22: Changes to home cooking, 26 March-16 April 2020
Christmas
Figure 23: What consumers give as Christmas gifts, 2018-20
Uptake of credit falls amid uncertainty
Figure 24: Consumer credit excluding student loans, January 2018-November 2020
The UK agrees a late post-Brexit trade deal
COMPANIES AND BRANDS – KEY TAKEAWAYS
Retailers continue to target sustainability 
Harnessing social media 
COMPETITIVE STRATEGIES
Sustainability remains a key differentiator 
IKEA buys back old furniture 
Homebase launches Green Aisles 
Figure 25: Homebase Green Aisle, October 2020
Product recycling 
Technological innovation to bridge the gap between stores and housebound consumers
In-store videoconferencing 
Virtual design services 
Augmented Reality 
Advancements in mobile purchasing
First-of-its-kind kitchen purchasing app
Apps to make shopping in-store easier 
Home retailers target renewed interest in health and wellbeing
A new spotlight on sleep
The focus on diet benefits small appliances
DIY retailers target the younger generation
Kingfisher targets speed, social media and service 
Figure 26: Made.com and Pinterest, October 2020
New opportunities moving forward
LAUNCH ACTIVITY AND INNOVATION
Pop-up work-from-home solutions
Figure 27: Ministry of Makers, collapsible furniture, May 2020
Garden rooms move up the wish list
Figure 28: SteelPad Container, January 2021
Vegan furniture
Figure 29: John Lewis & Partners EcoMattress, October 2020
A rise in second-hand
COVID-19 concerns create new opportunities 
Virus-free wardrobe
New air purifier formats
Figure 30: LG PuriCare Wearable, September 2020
Figure 31: Airpool Smart Reindeer (portable), December 2020
THE CONSUMER – KEY TAKEAWAYS
COVID-19 sees spending and spending intentions grow significantly… 
…but demand remains polarised 
New opportunities from polarised demand
New opportunities online to engage housebound consumers
Flexible living shines the spotlight on communal and outdoor areas
IMPACT OF COVID-19 ON CONSUMER BEHAVIOUR
Anxiety spikes with the onset of a third national lockdown 
Figure 32: Extremely worried about exposure to COVID-19/coronavirus, 2 November 2020-26 January 2021
A fundamental change in shopping behaviours 
Older consumers lead the shift in behaviour
Figure 33: Changes in shopping behaviour, by age, 21-26 January 2021
The sector could be buoyed by redirected spending 
Figure 34: Spending, by sector, 21-26 January 2021
CONSUMER SPENDING ON THE HOME
Three quarters of consumers spent on the home in 2020
A clear uplift in lower-ticket sectors in the past year… 
…but the immediacy of this limits bigger projects
Figure 35: Consumer spending on the home, 2018-2021
New movers still underpinned activity
Figure 36: Consumer spending on the home, by duration in current home, October 2020
INTENTIONS TO SPEND ON THE HOME
Growth is matched in spending intentions over the next year
COVID-19 will continue to push the home to the fore
Figure 37: Intentions to spend on the home, 2017-21
Interior changes top spending intentions
Gardens move up the agenda 
The appetite for bigger projects could grow in the coming year
Figure 38: Intentions to spend on the home, 2019 and 2020
Spending plans vary by demographic
Figure 39: Intentions to spend on the home, by age and socio-economic group, October 2020
TRIGGERS TO PURCHASE 
Replacements top purchasing
The rise in flexible living opens new demand 
To create a space to work from home 
The need for rooms to do more drives the need for storage
To maximise the space in communal areas…
Figure 40: Triggers to purchase, October 2020
…but motivations vary by housing type
Figure 41: Triggers to purchase, by housing situation, October 2020
SOURCES OF INSPIRATION
Online just peaks in-store at the start of the purchasing journey
Store visits and websites sit neck-and-neck
New opportunities online to engage housebound consumers
A window of opportunity for retailers on social media 
Visualisation technologies bridge the gap 
Figure 42: Sources of inspiration, October 2020
Sources differ by category
Figure 43: Consumer spending on the home, by sources of inspiration, % difference, October 2020
MOST IMPORTANT FACTORS ONLINE 
Consumers look at costs
Reviews and demonstrations add assurance
AR tech comes to the fore
Virtual design services could be here to stay…
…offering an opportunity for smaller, more nimble home retailers
Figure 44: Most important factors online, October 2020
Older consumers seek more tangible factors
Figure 45: Most important factors online, by age and socio-economic group, October 2020
BEHAVIOURS IN SPENDING ON THE HOME
The rise in flexible living
Uncertainty highlights the importance of the home for wellbeing
Risk of exposure sees many consumers take on tasks themselves
Sustainability remains on the agenda despite uncertainty 
Figure 46: Behaviours in spending on the home, October 2020
COVID-19 AND SPENDING ON THE HOME 
A third expect to boost spending in the next year…
…but demand will remain polarised
Figure 47: The impact of COVID-19 on spending in the year ahead, October 2020
Ongoing uncertainty will maintain the spotlight on communal areas…
…and outside spaces
Figure 48: The impact of COVID-19 on spending in the year ahead, October 2020
Those spending less look to be more savvy 
With a push for upcycling 
Figure 49: The impact of COVID-19 on spending in the year ahead, October 2020
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
APPENDIX - MARKET SIZE AND FORECAST
Forecast methodology
Figure 50: UK Value of spending on the home, best and worst-case forecasts, 2015-2025 [prepared 9 February 2021]

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